As list brokers, we are often asked to extol the virtues of
creativity in list selection, which we actually rather like to do.
Let's face it, it makes our job that much more interesting if the client
is prepared to accept more from us than just a basic set of
recommendations and counts.
But there are sound, commercial reasons to embrace a more creative
approach to lists. With response rates falling in many sectors, there
has never been a more crucial time to consider your data options. List
'fatigue' is a problem brought about by the fact that too many clients
are using too few lists. And not only are many companies using the same
lists but, in many cases, the same best performing segments. After all,
what works for one company is likely to work for its rivals.
So in what ways can we introduce creativity to mailing list selection?
Of late, clients are constantly being told that they should be 'thinking
outside the box'. In reality, this could mean moving away from the
obvious lifestyle data choices and exploring alternative opportunities
available from the thousands of other lists on the market.
Spreading the risk
There are many clients who, over the past couple of years, have come to
rely on lifestyle data. For a while now, I have felt extremely
uncomfortable about this (the words 'eggs' and 'basket' spring to mind),
and at Lloyd James we always recommend that our clients use both
lifestyle and non-lifestyle data. I would not suggest for one moment
leaving lifestyle out of the mix, but I feel it should not be used in
isolation. So why then are there still major companies out there who are
not exploring the alternatives?
Lifestyle data offers many advantages to the list user-the main ones
being volume and selectivity. They are huge sources of data with an
almost infinite combination of selection criteria. If you want volume or
specifics then lifestyle data will seem like the answer to your
prayers.
After all, where else could you realistically be able to select out a
person with two children and a cat who takes UK short breaks, regularly
flies on business, shops in Waitrose, reads the Racing Post and the
Scotsman and suffers from athlete's foot?
Similarly, if volume is what turns you on, then outside of the Electoral
Roll lifestyle data is your answer. Even in these days of lifestyle's
falling response rates there remains massive volumes of recent, highly
selective data. And let's not forget the wealth of profiling techniques
and sponsorship opportunities available from these companies.
So, why consider looking outside lifestyle data sources? Quite simply,
because everyone else is doing it and that means your competitors too.
±±¾©Èü³µpk10 cycles tend to be fairly constant within each market sector and
therefore the chances of mailing the same people at the same time as
your competitors do is inevitably high. After all, the chances are that
the people on lifestyle lists who are your best prospects are also the
best prospects of your competitors. During the busier periods of the
year it's a race to see who can get their offer through the letterbox
first.
Lifestyle can be considered an easy option. After all, there are only
half a dozen lists for you to consider and some clients and agencies
have stopped using list brokers in favour of ordering direct from just a
handful of suppliers. They forget that the broker's specialist knowledge
and the fact that they deal with different lists every day means they
are better placed than most to come up with laterally thought-out,
better-performing solutions.
Benefits of a loyalty database
For the novice, the sheer volume of alternative list sources can be
off-putting, but there are broking experts out there who can guide and
advise you. There can be a huge temptation for some brokers to sit on
the fence when faced with the difficulties of recommending new and
innovative list sources to their clients. But when they do, prepare to
be astounded at the wealth of data available.
You need to go out of your way to find lists which most closely mirror
your own customer database profile. After all, your own customer list
should always out-perform those you source externally. You can do this
scientifically by utilising data profiling techniques in the case of
Electoral Roll or lifestyle data, or by simply identifying links and
similarities between your own customers and individuals on other
databases.
The example I like to quote is the Homebase Spend & Save database (see
panel), the attraction of which is that it features people who are
actively spending. In view of its success, we have concentrated efforts
since on adding similar retailer loyalty databases to their portfolio,
Toys R Us being a good example.
As with Homebase, Toys R Us gold card holders are actively spending,
brand loyal customers with children. While we can select parents from
other list sources, we don't always know whether they have the
propensity to spend hard cash on your products. It's a similar story
with the Mothercare database which allows you to target doting new
mothers who are actively spending on baby equipment and all the
associated products and services.
Of the thousands of alternative data sources available there are
literally hundreds which are superbly responsive. Although lists such as
Homebase, Toys R Us and Mothercare have volume on their side, you should
not ignore the smaller, more ruche lists which again can be eminently
suitable for your campaign.
We recently worked on a campaign for a major airline which wanted to
target travellers to North America. The proposal included several test
cells for lifestyle data which gave us the opportunity to target
individuals who travel to the region either for business or pleasure
and, in some cases, frequency of travel. This is where lifestyle data
comes into its own, as you can nearly always find exactly the selection
you require.
The non-lifestyle section of the proposal contained a wide variety of
lists. Few of these could be anywhere near as specific as the lifestyle
sources. Some of the travel club lists had to be omitted due to a
conflict of interest with the client concerned. This meant we had to
look outside the obvious and select according to the general profile of
the database.
We included lists such as Wall Street Journal, The Week, Fortune and
Time Magazine, all of which afforded us the opportunity to target by
profile the executive who travels extensively on business.
We also recommended testing exporters to the region from business
databases such as Dun & Bradstreet and Pathfinder as well as lists of
company directors in organisations with head offices or subsidiaries in
the US. In the vast majority of cases these alternative sources,
particularly the publications in this instance, equalled or outperformed
the lifestyle data.
A wealth of opportunity
As we have already mentioned, any venture into the foreign territory of
unknown data sources will involve testing, but let me add a word of
caution. When you have tested successfully consider retesting a larger
segment if volume allows. Whilst testing indicates what may happen at
roll out stage, it can never be conclusive as any experienced direct
marketer will confirm.
You can be as scientific as you like but you will never escape from the
most important factor that can affect your campaign results - lists
contain living beings who breathe, have mood swings, are affected by the
weather and what they had for breakfast. They are affected by what's
going on in the world that day and you might catch them in the dreaded
week before pay day. Whilst you can gain a good understanding of how a
list will work for you, the most sophisticated predictive tools cannot
compensate for the fact that you are relying on real people.
If you are now convinced of the need to test new sources of data, then
you should now start being a little more adventurous with the selections
you use. You always need the basics, and recency has to be the one
selection which influences response above any other.
There are many others which are not far behind. Frequency is key if you
are using a mail order list someone who has been a frequent purchaser
will generally respond better than someone who has made a one-off
purchase.
Once you have decided on the basics you need to set about selecting
sections of lists that work for you. A list that provides you with a
mediocre response can have a cell within it that turns into one of your
key performers.
Publisher lists, for example, can offer selections by interest
categories according to the magazine the individuals are subscribing to.
Would you subscribe to Practical Caravan unless you were an out-and-out
enthusiast?
If you are in financial services, then you need to know that individuals
on the list are going to get through your credit score card. Any
indication that an individual has already passed this process will
obviously help.
Look, for example, at how people have paid for the goods they have
purchased in order to get onto the list in the first place. If they paid
by credit card or on extended credit terms, then they have already gone
through some form of credit scoring.
For brokers and their clients the world of data is an exciting one right
now. Probably the most interesting developments are the explosion of
email data and the advent of SMS marketing. But these opportunities
would provide the material-for articles in their own right.
In the meantime, cast aside the growing caution we have witnessed over
the past couple of years with mailing list data. Explore the new sources
and discover the realm of possibilities they afford.
TOP TIPS: LIST RENTAL
- To get the most from budgets, test different lists/new selections
regularly.
- Monitor results regularly, adjusting future activity accordingly.
- The proportion of test versus roll out depends on future expansion
plans/budgets, but 80 per cent roll out/io per cent test is
workable.
- The best creative and strategy is wasted If you can't find a prospect,
or run short data. Research lists at an early stage. Leaving it too late
could mean you can't target the people you want to in the numbers you
need.
- Tell brokers as much as possible. Understanding the target market and
product is vital for them to give the best advice on which lists to
use.
- Goneaway rates depend on the source. Expect up to six per cent on
compiled lists, less than three per cent on magazine or response
lists.
- Ordering 20,000 plus records and deduping against other lists? Ask for
a net name deal. Some list owners offer discounted rental or free names
instead.
- Appropriate selection means the difference between success and
failure. Selections refine the list to target those with an affinity to
the promotion. Individual campaign needs vary, but the important
selections are:
1) Recency-inaccurate addresses are less likely on newer data.
2) Buyers rather than enquirers - past spend is a good indicator.
3) Known purchasing influence or interest in product
Source: Dudley Jenkins.
CASE STUDY: HOMEBASE
When Lloyd James List Management launched the Homebase Spend & Save
database onto the market some seven years ago we initially met with much
resistance from the list buying market. Their reason: the individuals on
the list were not mail order buyers or direct mail responders and
therefore it would not work as they were not mail responsive.
But in concentrating on its perceived weaknesses some list users were
failing to see the strengths which are marry. These people are actively
spending money, they are homeowners and, most importantly, they are
brand loyal.
What's more, there are large volumes of data available on over three
million active customers. They are age-selectable which allows the
advertiser to target their offer to individuals at the right life
stage.
If we compare this database to a typical lifestyle database what we lack
in terms of selectability we gain in terms of the fad that we know for
sure that they are actually spending money.
By encouraging clients to test we found that the Homebase database not
only worked but, in many cases, out-performed tried and tested lifestyle
cells. Not only that, there were significant benefits in terms of
lifetime value. Of course, it doesn't work for everything but by testing
we found it to be one of the best performing lists for the financial
services sector.
TOP TIPS: ASSESSING LISTS
- What is the source of the list?
- How frequently is the total list updated and by what means?
- When was it last mailed, and by whom?
- Who has used the list successfully? (Ask for names of clients you can
speak to)
- What is the refund policy on gone-away addresses?
- What formats are available?
- What are the terms and conditions attached to renting the list?
- How long from time of order to delivery of list?
- Will the list broker/manager provide you with a sample of the
data?
Marketing.
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